Nonprofits Want AI, But Back Office Gaps Slow Progress

Unit4, a provider of enterprise cloud applications for people-centric organisations, has launched an international study of nonprofits commissioned by IDC. “Mission Impact Through Unified Insight: Modernising the Nonprofit Enterprise” shows organisations are keen to embrace AI to support their strategic ambitions but they are held back by significant backoffice issues. Greater focus on technology integration will be key to fulfilling goals in 2026 and beyond.

Nonprofits embracing AI

83% of nonprofits surveyed have GenAI investment on their strategic roadmap and 67% have plans for predictive AI.
Among nonprofits with over 1,000 employees, 87% have an AI strategy linked to their business transformation objectives compared to only 32% of organisations with 250–999 employees

Respondents view AI as a way to better deliver key use cases such as:

Predictive maintenance and asset management
Data entry and documentation
Automated report generation

There is also an understanding that AI can deliver automation and augmentation:

Automation focus: in the next 24 months to improve real-time insights and reporting as well as delivering automated workflows to reduce manual errors
Augmentation focus: in finance respondents see AI as a way to augment top three being Accounts Receivable, Accounts Payable and Financial Reporting

“Given all the volatility nonprofits face, it is understandable they view AI as a vital way to maximise their available resources,” said Rafael Artacho, Director AI Product Incubation, Unit4. “They also appreciate AI can provide a variety of benefits from predictive analytics to automation and augmentation. Larger organisations may be slightly further ahead in assessing the technology, but this is also a great opportunity for smaller organisations who can adopt AI integrations as part of packaged solutions tailored to their specific sector and needs.”

Manual processes and cumbersome financial systems

There are clear issues around accessing, using and managing ERP data:

45% of all respondents still use manual processes for policy, legal and compliance workflows
Large nonprofits have difficulty getting real-time or near real-time status updates and other information
39% of all respondents say financial information gathering and reporting is cumbersome

This is reinforced by the top three operational challenges:

Operational risk and compliance oversight
Limited technology adoption and integration
Siloed information

Integration key to single source of truth

Respondents say technology provides opportunities to unify data and, with AI innovation enables new user experiences, new levels of transparency and deeper measures of impact. More than half of respondents (54%) also confirm a preference for deploying backoffice applications on the public Cloud compared to 26% who choose hybrid Cloud.

Nonprofits are prioritising greater integration between core backoffice systems to support this move to the Cloud:

100% of all nonprofits are planning to integrate finance and accounting and HR
Over 90% are planning to integrate operations management and programme and project management
82% want to integrate procurement, purchasing and sourcing

This integration will lead to a single source of truth for information within these organisations, which will enable improved:

Visibility into processes
A unified view for consistent compliance
Data quality and better decision making with AI
Financial controls and compliance
Streamlined processes

Fulfilling strategic imperatives

If nonprofits can overcome these integration challenges, it will help them to address their main business challenges:

Raising funds, grants and building donor relationships (40%)
Financial sustainability (34%)
Measuring and demonstrating mission impact (31%)

And it should also help them to fulfil their strategic priorities:

Fundraising, financial growth and diversification
Improving the delivery of mission outcomes
Growing mission impact and outcomes

“With the significant challenges facing nonprofits today, there is a real appetite to embrace innovation as a means to achieving strategic ambitions,” Ruthbea Yesner, Vice President Government Insights, Education, and Smart Cities, IDC. “A key starting point must be increased integration between core backoffice applications, because this will enable the single source of truth necessary for digital innovation such as AI.”

Methodology

In October 2025, IDC interviewed 70 nonprofit organizations with 250 or more employees. Those interviewed are headquartered in North America and Europe, but operate in multiple countries globally.

Access the “Mission Impact Through Unified Insight: Modernising the Nonprofit Enterprise” report here.

Source: Unit4

The preceding press release was provided by a company unaffiliated with NonProfit PRO. The views expressed within may not directly reflect the thoughts or opinions of the staff of NonProfit PRO.